Insights from the Parliamentary Debate on the Single Disciplinary Body

AFA News 12 August 2021. On Wednesday 4 August 2021, the House of Representatives debated the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Bill 2021, which is the bill that will deliver the Single Disciplinary Body. The speeches highlight the issues on advice.

During the debate, there were a total of nine speakers, with three from the Coalition and six from the ALP:

  • Dr Andrew Leigh – ALP ACT
  • Stephen Jones (Shadow Minister) – ALP NSW
  • Tim Wilson – Liberal VIC
  • Matt Thistlethwaite – ALP NSW
  • Bert van Manen – LNP QLD
  • Dr Daniel Mulino – ALP VIC
  • Matt Keogh – ALP WA
  • Julian Hill – ALP VIC
  • Paul Fletcher – Liberal NSW

There was a consistent message across almost all speakers that financial advice was in a state of crisis and that everyday Australians were at risk of losing access to financial advice.  There was a strong recognition of the importance of financial advice and the need to fix the issues.  The ALP was very critical of the Government for their handling of the Banking Royal Commission and FASEA in particular.  Stephen Jones, the Shadow Minister for Financial Services and Superannuation was blunt in his assessment of how the Government had let down financial advisers:

“I want to pause to point out that financial advisers are a constituency where, if you took them as a whole, you would say that there are probably more Liberal voters amongst them than Labor voters. This is a constituency the coalition likes to think of as their own, but they have treated them so appallingly, not only in the design and implementation of professional standards but in the ongoing incompetence in the administration of this profession. It is no wonder that members of this profession are standing up and questioning their lifelong commitment to Liberal Party policies or Liberal Party governments. They are asking, ‘Why are we backing these guys when, every step of the way, they have sold us down the river and shown monumental incompetence and a lack of understanding of our profession and our industry and what is needed in order to properly regulate it?’—to remove those people from the profession who we all agree do not belong and ensure that financial advisers can do the critical job that is needed to provide Australians with timely, accurate professional advice in the best interests of those clients.”

We look forward to hearing more from Stephen Jones at our conference this year.

As is often the case, many of the speeches failed to deal with the specifics of the Bill, nor address the concerns that have been addressed across the financial advice sector.  Much of it was political positioning, however, it is useful as a guide to see the emerging thinking about financial advice in the Parliament.

Bert van Manen from the LNP in Queensland, who is a former financial adviser, also spoke of the journey to professionalism and the value of financial advice:

“I acknowledge, as somebody who came from that industry prior to coming into this place, that there are people in the industry who have done the wrong thing by consumers over the years. That disappoints me greatly and I will never defend that conduct, but that doesn’t take away from the fact that the vast majority of advisers are professional advisers whose focus is ensuring they provide advice that is in the best interests of their clients. Those opposite miss the point that it’s also in the advisers’ best interests to provide quality advice to their clients because that is how they get to build and maintain their businesses. There are many thousands of advisers across the industry who have been in business for 20 or 30 years or longer. You cannot say that those people are providing poor quality advice.”

The final speaker from the ALP was Julian Hill, a Victorian who spoke well on the issues confronting financial advice, however, he also provided some personal insight on his own experiences, where he and his family were the beneficiaries of life insurance that was undoubtedly facilitated by an adviser:

“I know the importance of life insurance firsthand. My dad died when I was four, and, frankly, we were only able to keep the house because Dad had life insurance so Mum could pay off the house. We didn’t have much else after that, but it was only because of that foresight, the conservative approach of having life insurance to protect your family, that we kept the house. I stress that we have greater coverage now because of superannuation, but, without the role of financial advisers pointing people towards appropriate products, we may see further problems emerge.”

Personal experience and reflection is the greatest promotion of the value of financial advice, and very important to have this addressed in the Federal Parliament.

We need to thank all speakers in this debate, for their interest in financial advice, and their apparent commitment to fixing the current problems.  There were no solutions discussed during the debate, however a demonstration of the need to address the problems and ensure that financial advice remains available for everyday Australians.  We encourage financial advisers in their electorates to reach out to them and to tell them your story and what you think needs to be done.

Please click here to read the Hansard of the speeches from the Better Advice bill debate.